LOS ANGELES — Moody's Investors Service affirmed the Aa1 rating of Montana Board of Housing Single Family Housing Program bonds ahead of plans to price $71.5 million of debt.

The outlook remains stable.

The board of housing on April 8 plans to sell the bonds that will be used to purchase single-family whole loans.

Analysts also affirmed the ratings on roughly $162 million in outstanding single family program bonds.

"The Aa1 rating reflects the strong financial position of the program, the existing and expected loan composition, and the bond structure," analysts said.

The bonds' strengths are a solid program asset-to-debt ratio as of 1.48 times as of June 30, debt service reserves equal to maximum annual debt, and a mortgage reserve fund equal to 1% of outstanding mortgage principal.

Analysts also cited a strong loan portfolio composition that is entirely government mortgage insured 54% by the Federal Housing Administration, 33% by the U.S. Department of Agriculture-Rural Development and 11% by the U.S. Veteran's Administration. An additional strength is that an increasing percentage of mortgage loans are expected to be serviced in-house. That coupled with growing and continued new mortgage origination will provide a steady revenue stream.

The fact that the program is not profitable is mitigated by a high program fund balance of 47% of bonds outstanding, but the lack of profitability also means the rating is unlikely to rise in the near term.

The stable outlook is based upon healthy program asset-to-debt ratio and a strong mortgage portfolio composition.

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